Due to the Ukraine War, Russia has turned to the Asian market for the export of energy resources. The most prominent actor in this regard is China along with the Central Asian countries. In the pre-war period, the two sides were engaged in energy cooperation and partnerships. However, in the new period that started with the war, efforts are being made to deepen cooperation in this field.
On June 13, 2023, Russian President Vladimir Putin signed a law approving an intergovernmental agreement allowing the export of natural gas supplies from Russia to China via the Far East.[1] The agreement marks a new phase in Beijing-Moscow energy cooperation. In January 2023, the parties signed an agreement defining the terms of cooperation for gas supply from Russia to China via the Far East route, including the cross-border section of the gas pipeline. This new development can be characterized as a continuation of this agreement.
The Far Eastern route plays an significant role in the energy partnership and trade between the two countries. According to a statement by Gazprom, the Far Eastern Route Project is expected to increase Russia’s pipeline gas supplies to China by 10 billion cubic meters per year once it reaches full capacity.[2] This is one of the indicators of the deepening ties between the two countries.
Meanwhile, Beijing and Moscow are negotiating the Siberian Power-2 Russia-China gas pipeline. At the same time, natural gas cooperation between the two countries is being diversified with alternative routes, including the supply of liquefied natural gas (LNG). Consequently, natural gas flows between the parties are also increasing. Russia aims to deliver more natural gas to China through Central Asia. This is because transfer to Europe is now difficult. Therefore, Moscow has also focused on the Asian geography.
The energy partnership between Russia and China has been affected by the atmosphere created by the Russian-Ukrainian war. However, even before the war, the parties took steps to increase their partnership. For instance, in February 2022, just before the war started, Russia signed a 30-year agreement to supply natural gas to China. It agreed that the Russian energy company Gazprom would supply China National Petroleum Corporation with an additional 10.0 billion cubic meters (bcm) of gas per year until 2026.[3] Another similar agreement between the parties was concluded in 2014.
The Russia-China Energy Business Forum between the two countries has also played a major role in advancing Beijing-Moscow relations on an energy basis. On the occasion of the forum held on November 29, 2022, Russian Deputy Prime Minister Alexander Novak stated that Moscow is seeking wide-ranging cooperation with Beijing in the energy sector. Novak made the following remarks on the subject:[4]
“China is one of the most important equipment manufacturers in the oil and gas sector. There is already close cooperation on the supply of oil and gas equipment for projects in Russia. We plan to jointly develop and produce equipment that can be used both in China and Russia.”
Chinese President Xi Jinping has also described energy cooperation with Russia as a “cornerstone”.[5] At the same time, Europe’s move to halt imports from Russia has led China to take advantage of discounts on Russian oil. This paved the way for new developments in energy cooperation between the two countries. China also benefited from the restrictions imposed on Russia after 2014 and accelerated its investments in Russian energy projects. In this respect, it can be stated that the foundations of the current cooperation and closeness were laid during the aforementioned periods.
Russia is trying to develop its energy cooperation and trade with China through Central Asian countries. Russia’s proposal to Kazakhstan and Uzbekistan for a trilateral gas union can also be seen in this context. This proposal aimed to increase Russia’s exports to Central Asia and from there to China. Thus, Moscow wanted to open the door to an indirect Russia-China partnership through Central Asia.
Moreover, China’s growing energy needs are also an important factor in strengthening the bilateral partnership. In parallel with Beijing’s growing needs, it is possible to state that its partnership with Russia will also develop. The role of natural gas in China’s energy consumption is projected to increase over the next decade. According to a document published by the National Development and Reform Commission, China plans to increase the share of natural gas in primary energy consumption to around 15% by 2030.[6] As neighboring countries and with developments in various sectors of cooperation between them, energy exports between Russia and China are likely to increase.
In sum, both China and Russia are in favor of raising the profile of energy cooperation between them. It is foreseeable that the bilateral energy partnership will be strengthened in terms of closer ties, efficient and profitable exchanges, and the development of green energy sources. Indeed, energy partnership is seen as one of the key and critical areas of Beijing-Moscow economic cooperation. In this direction, various cooperation mechanism efforts involving Central Asian countries can be expected to increase in the future. However, Beijing is also trying to take cautious steps to avoid being completely dependent on Moscow. In this regard, it attaches importance to the diversity of cooperation and pursues a multi-actor-multidimensional policy.
[1] “Putin Ratifies Agreement With China on Gas Supplies Cooperation”, TASS, https://tass.com/economy/1631287, (Date of Accession: 17.06.2023).
[2] “GT Voice: China-Russia Gas Cooperation Conducive to Intl Energy Security”, Global Times, https://www.globaltimes.cn/page/202306/1292602.shtml, (Date of Accession: 17.06.2023).
[3] “The State of China-Russia Cooperation Over Natural Gas”, IISS, https://www.iiss.org/publications/strategic-comments/2023/the-state-of-china-russia-cooperation-over-natural-gas/, (Date of Accession: 17.06.2023).
[4] “Russia Pursuing Extensive Energy Cooperation with China: Deputy Premier”, AA, https://www.aa.com.tr/en/politics/russia-pursuing-extensive-energy-cooperation-with-china-deputy-premier/2751087, (Date of Accession: 17.06.2023).
[5] “Russia, China Look to Increase Energy Cooperation Amid Western Sanctions”, SP Global, https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/oil/112922-russia-china-look-to-increase-energy-cooperation-amid-western-sanctions,
[6] “GT Voice: China-Russia…”, a.g.m.
